In the particular case a male sales manager had a relationship with a junior female. Regrettably the relationship ended but it led to the junior finding it impossible to work in the same environment and lots of ‘nods and winks’ going on among the rest of the staff.
Whether a relationship begins or ends can have a negative effect. There could, for instance, be perceptions of, and real, conflicts of interest and favouritism.
Dismissal of either person could be considered unfair and quite probably sex discrimination. If the employment contract allows, and it is possible, then it can be a good idea to transfer one or other. Care again has to be taken to ensure this does not involve demotion or leaving the person without the skills to effectively do the job.
In any complex set of eventualities you can always fall back on issuing a policy on relationships at work. You could, for instance, make it a requirement that relationships in the same team must be disclosed (but, of course kept confidential) and set down standards of conduct to avoid office gossip.
Naturally if there could be conflicts of interest e.g. with disciplining processes or appraisals then you should reserve the right to change the people involved.
When relationships break down there can be an issue of harassment. You are obliged as an employer to take reasonable steps to prevent it. Again a policy is useful and, of course it should be applied fairly and consistently.